cash flow statement layout Flashcards
what does cash flow statement offer
a full and holistic picture of cash flow
what are the three sections of the cash flow statement
- operating profit
- investing actitives
- finnacing activites
what does the operating profit section offer
everything thats added or taken away to turn into cash flow
what is shown in the operating profit section
+ depreciation
+/- inventory
+/- trade recievables and prepayments
+/- trade payables and accruals
+/- interest paid
+/- tax paid
+/- dividens paid
how do you know whether to take away or add inventories and trade receivables
look at the SOFP at the start and end. if there is an increase then it should be taken off, if there is a decrease it should be added
how do you know whether to take away or add trade payables
increase should be added on
decrease should be taken away
how do you work out accruals
- look at amount recorded on income statement and opening of SOFP
- add last years accrual
- take off any closing accrual at this years end
what do you put in the investing activites seciton
- negative amount any cash gone out on buying non-current assets
- positive any money made from selling non-current assets
what do you put in the financing actitvies section
received or spent any money on long- term financing (shares, debentures) negative amount if paid off this year
